David Simon
About David Simon
David Simon (age 63) is Chairman, Chief Executive Officer and President of Simon Property Group; he has served as CEO since 1995, Chairman since 2007, President since 2019, and director since 1993. He previously worked as an investment banker (1985–1990) specializing in M&A/LBOs and holds a B.S. from Indiana University and an MBA from Columbia Business School . Under Simon’s leadership, 2024 results included real estate FFO of $4.877B ($12.24/sh), +3.9% YoY, portfolio NOI +4.6%, and 2024 TSR of 26.9% (vs. MSCI US REIT 8.8% and FTSE NAREIT Equity Retail 14.0%); net income attributable to common shareholders rose 3.9% to $2.368B . Since IPO, SPG cites a cumulative shareholder return of ~4,000% with material growth in net income, revenue, FFO, NOI and market cap, and sustained A-/A3 credit ratings .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Simon Property Group (predecessor) | President | 1993–1996 | Helped lead early growth and IPO-era structure (umbrella partnership REIT) . |
| Wall Street investment banks | Investment banker (M&A/LBO) | 1985–1990 | Transaction expertise foundational to SPG’s acquisition-led expansion . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Klépierre, S.A. | Chairman of Supervisory Board | Current | Oversees a major European retail REIT, supporting SPG’s international perspective . |
| Apollo Global Management, Inc. | Director | Current | Exposure to capital markets and alternative asset management . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,250,000 | 1,250,000 | 1,250,000 (unchanged since 2011) |
| Annual Cash Bonus ($) | 28,000,000 | 4,000,000 | 3,000,000 |
Notes:
- CEO base salary has been flat since 2011; SPG emphasizes at-risk pay for CEO and NEOs .
Performance Compensation
Annual Cash Incentive (ACI) – 2024 design and outcome
| Metric | Threshold | Target | Maximum | Actual | Outcome |
|---|---|---|---|---|---|
| Real estate FFO per share | $11.59 | $11.79 | $11.99 | $12.24 | Pool funded at maximum ($13.5M); CEO bonus $3.0M . |
Long-Term Incentive Program (LTIP) structure (granted 2024)
- 75% performance-based LTIP units measured on three-year diluted FFO/share (as adjusted) with TSR modifier (60% weight) and strategic objectives (15% weight); 25% time-based RSUs over three years .
- No stock options have been granted since 2001 .
2022–2024 LTIP performance (settles/vests per plan)
| Metric | Weight | Threshold | Target | Max | Actual | Payout |
|---|---|---|---|---|---|---|
| 3-yr diluted FFO/share, as adjusted CAGR | 60% | 1% | 2% | 3% | 1.69% | 97.4% of target; TSR = 30.8% → +15% TSR modifier applied to earned units . |
| Strategic objectives achieved (out of 9) | 15% | 4 | 6 | 8 | ≥8 | 150% of target for this component . |
| Total weighted payout | — | — | — | — | — | 107.9% (performance component) . |
| CEO 2022 LTIP units earned (#) | — | — | — | — | — | 37,109 units (vest 1/1/2026, cont. service) . |
Other Platform Investment (OPI) Program – 2024 grants (Authentic Brands monetization)
- Pool mechanics: 9.9% of net proceeds above “cash invested + 8% cumulative preferred return” hurdle; ABG monetization generated $1.5B cash proceeds; Max pool $116.1M; Committee reduced to $97.0M and extended vesting to 5 years for NEOs .
- CEO award: 280,672 Series 2024-2 LTIP Units, vesting 20% annually over five years (subject to continued service) .
2024 OPI Award – CEO Vesting Value by Year (Grant-Date Fair Value)
| Year | 2025 | 2026 | 2027 | 2028 | 2029 |
|---|---|---|---|---|---|
| Vesting ($) | 9,290,343 | 9,290,343 | 9,290,177 | 9,290,177 | 9,290,177 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (shares+units) | 29,043,886; 8.23% of voting power as a single class (includes common, Class B, and exchangeable OP units via MSA group methodology) . |
| Units beneficially owned | 26,842,759 OP units; 7.12% of OP units outstanding (exchangeable 1:1 for common or cash at company’s election) . |
| Unvested/Outstanding equity at 12/31/24 (CEO) | RSUs: 16,413 ($2.83M); 20,619 ($3.55M); 17,197 ($2.96M). OPI LTIP Units: 280,672 ($48.33M). LTIP Units (unvested/uneared tranches): 2024: 97,121 ($16.73M); 2023: 68,637 ($11.82M); 2022 earned 37,109 ($6.39M) vest 1/1/2026; 2021 earned 57,867 ($9.97M) . |
| Share retention/ownership guidelines | CEO 6x base salary; others 3x; NEOs meet or exceed; must retain post-vest shares until retirement/exit per policy . |
| Hedging/pledging | Prohibited for NEOs and directors . |
| Stock option exposure | None; SPG has not granted options since 2001 . |
Potential selling pressure considerations:
- Large scheduled vesting from 2024 OPI awards (five annual tranches) may create periodic Form 4 activity; trading governed by insider trading policy with blackout windows; any sales would still be subject to no-hedge/no-pledge policy .
Employment Terms
| Provision | Status/Detail |
|---|---|
| Employment agreement/term | No fixed-term employment contracts for NEOs; CEO has no employment agreement . |
| Severance (involuntary, RIF/merger/outsourcing) | Discretionary policy; typically 1 week per year of service, max 16 weeks, generally lump sum; CEO severance estimate aligns with 16 weeks ($384,615) . |
| Change-of-control (CoC) mechanics | Double-trigger: if awards are continued/assumed, time-based vesting does not accelerate unless termination without cause/good reason; if not continued/assumed, vesting/earnings determined at CoC; performance LTIP measured at CoC; no single-trigger cash severance . |
| Clawback | Revised policy effective Oct 2, 2023; awards expressly subject to recovery . |
| Tax gross-ups | None (incl. parachute excise taxes) . |
| Non-compete/non-solicit | Not disclosed in proxy. |
Estimated Post-Employment Payments (12/31/24)
| Scenario | Severance ($) | RSUs/Restricted ($) | LTIP Awards ($) | Total ($) |
|---|---|---|---|---|
| Company without cause | 384,615 | — | — | 384,615 |
| Death or disability | — | 9,338,776 | 78,032,009 | 87,370,785 |
| Change of control (no termination) | — | 9,338,776 | 93,100,176 | 102,438,952 |
| CoC + termination w/ good reason or without cause | 384,615 | 9,338,776 | 93,100,176 | 102,823,567 |
Note: Equity treatment follows plan documents; performance units earned at CoC per mechanics; double-trigger applies where awards are continued/assumed .
Board Governance (including dual-role implications)
- Roles/tenure: Chairman & CEO since 2007/1995; also President since 2019; not independent .
- Dual-role mitigants:
- Lead Independent Director (Larry C. Glasscock) with robust authorities (agenda/material approvals, executive session leadership, shareholder access); independent directors held 5 executive sessions in 2024 .
- 77% independent board; all directors elected by common shares are independent; all Audit, Compensation & Human Capital, and Governance & Nominating members are independent .
- Majority vote standard in uncontested elections; annual elections .
- Class B structure: Simon Family Group’s 8,000 Class B shares elect a minority of directors (currently 3 of 14) and may not serve on committees; transactions involving the Simon family require majority independent director approval; sunset mechanics reduce/eliminate Class B rights with lower family ownership .
- Meetings and attendance: Board met 7 times in 2024; all directors met ≥75% attendance; all attended 2024 annual meeting .
- Director compensation framework (context): Non-employee directors receive $110k cash retainer and ~$175k in restricted stock plus committee/lead retainers; directors must hold $850k in SPG stock within six years; hedging/pledging prohibited .
Compensation Committee Analysis
- Committee members: Reuben S. Leibowitz (Chair), Allan Hubbard (retiring 5/14/25), Stefan M. Selig, Daniel C. Smith, Ph.D.; all independent .
- Independent consultant: Semler Brossy (no other services to management; annual independence assessment) .
- Shareholder feedback and response: 2023 Say-on-Pay approval was 11.1%; SPG redesigned OPI program in Nov 2023 (formulaic pool above 8% hurdle, equity-only, time vesting, limited discretion) and achieved 94.3% approval in 2024; 2025 proxy cites 94% say-on-pay support at 2024 meeting .
Related Party Transactions (governance risk review)
- Management/fees: SPG manages two centers owned by entities with Simon family interests; received $3,912,892 in 2024 .
- Aircraft: Payments to DS Aviation LLC (beneficially owned by David Simon) of $3,518,175 in 2024 under an aircraft lease; $58,000 to Simon Hangar LLC (Herbert Simon-owned) for management services; $21,760 reimbursement tied to temporary use of Herbert Simon’s aircraft; all below charter market and approved by independent directors .
- Policies: Audit Committee must review/approve related person transactions; independent director majority approval required for transactions involving the Simon family group .
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay: 94% approval (advisory) .
- 2023 Say-on-Pay: 11.1% approval; led to A&R OPI redesign and enhanced disclosure/engagement .
Performance & Track Record
- 2024 highlights: Net income to common +3.9% to $2.368B; consolidated net income +4.3% to $2.729B; FFO $4.877B ($12.99/sh); portfolio NOI +4.6%; dividends of $8.10/sh (+8.7%), >$3B cash returned to shareholders .
- Operational KPIs (2024): U.S. Malls/Premium Outlets occupancy 96.5% (+70 bps); retailer sales $739/sq.ft.; base minimum rent $58.26/sq.ft.; 5,500 leases for >21M sq.ft.; $11B capital raised; 17 projects delivered .
- Long-term: IPO to 2024, ~4,000% shareholder return; market cap growth to ~$100B; sustained investment grade with A ratings since 2006 .
Equity Ownership & Director Service Summary (Board service history)
- David Simon: Director since 1993; Class B director nominee; not independent; no committee assignments; age 63 .
- Independence and committees: Class B directors may not serve on committees; all three standing committees fully independent .
Risk Indicators & Red Flags
- 2023 Say-on-Pay failure (11.1%) subsequently addressed via program redesign and 2024/2025 strong approvals .
- Related party transactions (aircraft, MSA) present recurring optics risk; approved by independent directors and disclosed with amounts .
- Family employment: Employment and substantial awards to Eli Simon (EVP/CIO, Class B director) and hiring of Sam Simon (SVP Corporate Investments) approved by independent directors/Comp Committee; potential governance optics noted by investors .
- Hedging/pledging prohibitions and robust ownership guidelines mitigate alignment concerns .
Compensation & Incentive Details (CEO multi-year)
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 1,250,000 | 1,250,000 | 1,250,000 |
| Bonus ($) | 28,000,000 | 4,000,000 | 3,000,000 |
| Stock Awards ($, grant-date fair value) | 6,264,867 | 10,000,259 | 56,451,380 (incl. $46.45M OPI) |
| All Other Comp ($) | 152,916 | 314,048 | 693,390 |
| Total ($) | 35,667,783 | 15,564,307 | 61,394,770 |
Employment & Contracts (severance and CoC economics – CEO)
| Scenario (12/31/24) | Severance | Equity | Total |
|---|---|---|---|
| Termination without cause | $384,615 | — | $384,615 |
| Death/Disability | — | $87,370,785 (RSUs + LTIP) | $87,370,785 |
| CoC (no termination) | — | $102,438,952 (RSUs + LTIP) | $102,438,952 |
| CoC + termination w/ good reason or without cause | $384,615 | $102,438,952 | $102,823,567 |
Investment Implications
- Alignment and retention: Very high insider ownership (8.23% combined shares/units) plus rigorous stock ownership/retention and no hedging/pledging support long-term alignment; five-year OPI vesting adds retention hooks through 2029 .
- Pay-for-performance: 2024 ACI funded solely by FFO/sh outperformance (max pool); LTIP emphasizes multi-year FFO growth with TSR modifier and strategic goals; 2022–2024 LTIP paid near target (107.9% weighted) with strong 3-year TSR, indicating performance linkage .
- Overhang/flow: Large unvested equity (notably 280,672 OPI units) could create episodic selling to cover taxes upon vesting; monitor Form 4s around annual vest dates; insider policy mitigates timing risk (blackouts) .
- Governance risk watchlist: Related-party aircraft arrangements and family employment merit continued monitoring, though independently approved; Class B structure retains minority board appointment rights but includes robust safeguards and sunset triggers; strong independent leadership (Lead Director) and executive sessions mitigate dual-role concerns .
- Shareholder sentiment: Sharp improvement in say-on-pay after program redesign (94%+ approval) lowers near-term governance overhang, but investors may continue to scrutinize any future OPI monetization awards and their vesting terms .